Weaker April jobs growth figures do not bode well for policymakers who would like to see economic improvements in the near future, economists said Friday.
Analysts with Capital Economics said business surveys for the month of April indicate the global economy began the second quarter with a steady, but “subdued” growth rate near 3%.
Still, the research team believes the U.S. and European economies are about to travel more divergent paths.
Capital Economics says the growth rate in the U.S. is sufficient enough to keep the Federal Reserve from implementing QE3, or an additional round of economic stimulus. Still, the report said weak payroll figures for the month of April — with only 115,000 jobs added — reinforces the view that unemployment will not drop fast enough to prompt the Fed to tighten its economic policies anytime soon.
The lower-than-expected job growth figures for April prompted Doug Duncan, chief economist with Fannie Mae, to call the Labor Department’s most recent report “bearish in almost every aspect.”
“The one mildly bright note was a 53,000 upward revision of payrolls over the prior two months, resulting in the average monthly gain in the three months ending in April moderating to 176,000, from 218,000 over the three-month period ending in January,” he said.
“If the slower pace of hiring is partly due to the payback from warm winter weather, then we may see some pickup in coming months. However, it will take some time to confirm whether this will turn out to be a temporary lull or a repeat of prior years’ disappointment after a promising start.”
kpanchuk@housingwire.com
